There are 2 types of damage in AoW: External damage and Internal damage. They’re like Physical and Magical damage in other games.Internal damage have 4 elementals : Yang, Yin, Hard, Soft. ( in other games they’re fire,ice,earth,etc…)
1.External Damage:

Hit rate base on Body Method stats.

Crit rate base on Strength stats.

Can be reduced by External defense stats.

Cant be reduced by any Internal defense.

2.Internal damage :

Hit rate base on Virgous Qi stats.

Crit rate base on Virgous Qi stats.

Cant be reduced by External defense stats.

Can be reduced by specific Internal defense.For example: Yang damage is reduced by Yang defense only.

As you can see, skill type,skill damage type and its bonus damage do not go together.

Skill type: We dont have external type of skill,instead we have 5 types :Taiji, Yang, Hard, Soft, Yin. The type of skill decide how much bonus damage it will receive from YOUR CURRENT INNER SKILL (20%,16% or none).

Skill damage : It’s written in the skill description : “..deal XX points ofExternal/Yang/yin/hard/soft damage..” This will decide which stat will the hit rate, crit rate and damage reduction of the skill is based on. ( as i wrote above)